OTT Voice, Messaging Actually Could Shrink Mobile Revenue 30% to 50% in India

Mobile service providers in the hyper-competitive Indian market, who earn nearly 80 percent of total revenue from voice, warn that they could lose perhaps 30 percent to 50 percent of current revenue from OTT voice and messaging competition.

You might argue that is simply a typical warning from incumbent service providers facing new competition, intended to buttress the argument for industry protection.

As valid as that observation might be, it also would be valid to note that voice revenue declines of at least that magnitude already have happened in many mature markets.

In the U.S. fixed network business, for example, revenue dropped 50 percent between 2002 and 2013.

Other products also have seen that magnitude of decline. In 1997, half of total telecom provider revenue was earned from long distance services in the U.S. market.

By 2007, mobility services had replaced long distance, which dropped more than 50 percent from 1997 levels.

Between 2001 and 2011, looking at consumer spending on communications, mobility spending grew from 25 percent to 48 percent of total spending. Other components obviously decreased by precisely the percentage mobility spending grew.

The point is that, even if one believes such claims of financial damage are a normal part of industry jockeying for position, there is good historical reason to believe revenue declines of that magnitude are quite within the realm of possibility.
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